March 14, 2017
By Mark Terry, BioSpace.com Breaking News Staff
New Haven, Conn. - Alexion Pharmaceuticals announced yesterday that as part of company restructuring, it will lay off about 7 percent of its workforce, or about 200 people. As of December 31, the company had 3,121 employees.
At the company’s fourth quarter and 2016 full year financial report on February 16, the company reported total revenue of $3.084 billion, an increase of 18 percent over 2015 and a volume increase of 22 percent. Total revenues for the fourth quarter were $831 million, up 19 percent from the same period the year before.
“In 2016 the global Alexion team delivered on our patient-centered objectives as we grew our leadership in complement by serving more patients with PNH and aHUS, and continued to build our metabolic franchise with the global launches of Strensiq and Kanuma,” said David Brennan, interim chief executive officer of Alexion, in a statement. “We also achieved important regulatory milestones towards new indications for Soliris and initiated two registration studies for ALXN210 to drive our future growth. Our 2017 guidance reflects double-digit revenue and EPS growth as we continue to grow our complement and metabolic franchises, prepare for the potential launches of Soliris in refractory gMG, and focus on our highest priority R&D programs.”
Which all sounds like good news. So why the restructuring and job cuts?
John Carroll, writing for Endpoints News, says, “Not much has been going right for Alexion Pharma over the past few months. Its CEO and CFO left under a cloud during an investigation of dodgy sales practices. Its attempts to diversify through an $8.4 billion acquisition of Synageva stalled. And its lead drug, a high profile Soliris, has attracted competition looking to undercut its steep price as sales have begun to decline.”
Back in late November and early December 2016, Alexion delayed its quarterly filing. The cause was an internal investigation based on a whistleblower’s allegations regarding the company’s sales of Soliris. That investigation blew up into what John Carroll, writing for Endpoints News writing in December , called “an ugly public scandal.”
In its annual report, the company indicated that in May 2015 it had received a subpoena regarding an investigation by the Enforcement Division of the U.S. Securities and Exchange Commission (SEC) asking for information related to grant-making activities and compliance with the Foreign Corrupt Practices Act (FCPA) in several countries. The information was related to Alexion’s recalls of specific lots of Soliris, as well as related securities disclosures.
The company also stated, “In addition, in October 2015, Alexion received a request from the U.S. Department of Justice (DOJ) for the voluntary production of documents and other information pertaining to Alexion’s compliance with the FCPA.”
Seeking Alpha, in December 2016, noted, that sales of Soliris were expected to drop quickly, “beginning as soon as the second half of 2017 due to suddenly ceding market share. The drug treats two conditions, one of which has viable products rapidly advancing into and through late stage trials; and the other should eventually have new treatments also.”
In addition, Soliris has the U.S. Food and Drug Administration (FDA)’s toughest warning label, and the upcoming competition appears to be safer, as well as having less complicated dosage regimens.
In an emailed statement to Reuters about the latest restructuring, the company stated, “We are investing our resources in key growth drivers, including our portfolio of marketed products.”
Alexion is currently trading for $124.74.
